Climate changes continue to challenge the SUPPLY of basic products. The drought has put pressure on many staples such as corn, soybean,s and cocoa.
Although the supply chain manager (CSCO) While it is generally known that climate change may affect their strategies, fewer supply chain leaders have strategies that fully identify the risks and how they may affect the availability of their most popular brands.
The topic was addressed at a symposium of the consulting firm Gartner, following the presentation of the session “A world without Doritos?”, led by the consulting firm’s senior analyst director, Claudia Clemens.
In a presentation on how climate change affects food and beverage supply chains, he explained the relationship between the two.
It also details why some of the world’s most prominent consumer packaged food (CPG) brands are at risk and are acting on behalf of supply chain leaders.
“If you look at the back of the label of your favorite brand of chips or cookies, it looks like there are over a dozen ingredients,” he said.
But usually,y those ingredients can be found in some important ones, without which the product cannot be made, he explained.
Limitations due to climate change
These commodities include corn, wheat, salt, cocoa, dairy products, soybeans, and vegetable oils such as sunflower oil.
All of these products face similar limitations from climate change, particularly the ongoing drought conditions in much of the developing world.
“A good example today is corn. “There are reports that a third of the world’s corn is now in a drought zone from the United States to China, to Europe and South America,” he said.
He said it is a similar story for many other commodities where growing global demand is met with uneven supply.
Impacts on key supply areas
Regarding the role of CSCOs in monitoring the risks associated with important products, he commented that the first thing they need to do is “educate themselves and the organization about the full scope of the real risks.” challenge.”
“Last year, when we surveyed CSCOs on these issues, approximately three-quarters expected climate change to affect their strategies,” he said.
In addition, less than half acknowledged not knowing how to make up for the full shortages in key supply areas.
CSCOs must ensure that they are aware of key climate risks that affect their most important commodities, such as the dislocation of availablelaborr.
The consulting firm predicts that by 2026, the effects of climate change will cause three times more supply chain disruptions because of the labor shortage, compared to today.
In search of more sustainable ingredients
Regarding more long-term solutions to address a limited raw material environment, he emphasized that brands are now rationalizing their portfolios.
They tweaked the recipes and thought hard about sharing.
Loss supply chain leaders are looking for alternative sources and pushing for more sustainable ingredients.
These are all necessary changes, even if they have to think big.
This is to keep its products relevant and available in an environment with commodity restrictions, he added.
“CSCOs need to engage their wider organizational ecosystem,” he stressed.
That includessuppliers customerss and internal stakeholders to solve problems and change in this environment.
Sharing data with suppliers is an important tool to address a problem without going away.
Als,o continue to move supply chains towards real-time decision execution and proactive shaping of NEED of clients.